Today’s Business: Connecticut leads the way ensuring fairness in trade practices — CUTPA at 50

While almost every state has some form of an unfair trade practices act, Connecticut’s is one of the more progressive. The principal reason is that CUTPA relies on what is called the “Cigarette Rule” for determining what conduct may be properly considered to be unfair. (Connecticut is one of just 16 states to do so.)

This rule is expansive and malleable, allowing for recovery from a defendant if conduct (1) offends public policy; (2) is immoral, unethical, oppressive or unscrupulous; and/or (3) causes substantial injury to consumers (or competitors). All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three. CUTPA permits claims by one business competitor against another, and does not require a showing of consumer injury. Many states, by contrast, require a plaintiff to prove consumer injury and do not allow for recovery under the first two prongs of the Cigarette Rule, substantially narrowing the reach of those statutes.

CUTPA affords a prevailing party expansive remedies that have been woven into the fabric of Connecticut’s statutory protections. Under this law, a successful plaintiff may recover compensatory and punitive damages as well as attorneys’ fees, litigation costs and injunctive relief.

At present more than 95 other Connecticut statutes expressly provide that a violation of that statute constitutes a per se violation of CUTPA. Some examples include the Home Improvement Contractors Act, Connecticut Unfair Sales Practices Act and the Lemon Law. That is, a violation of the Lemon Law is a violation of CUTPA.

There also is a growing body of case law that provides that violation of an underlying statute constitutes violation of CUTPA even if not expressly stated in the statute. One example is that our courts have held that a violation of the Lanham Act for trademark infringement constitutes a violation of CUTPA, making it easier to recover attorney’s fees and costs as the prevailing party in a trademark case.

An exciting aspect of CUTPA is that it is constantly evolving with the times, including to address unique challenges presented by new technologies and changing societal conditions. A Connecticut Supreme Court decision in 2019 (Soto v. Bushmaster Firearms International LLC, 331 Conn. 53) is illustrative of this evolution. Soto was brought by the administrators of the estates of the elementary school students and teachers killed at Sandy Hook Elementary School against the manufacturers, distributors and sellers of the rifle used in the shootings. They claimed that defendants’ advertising encouraged the gun violence. For the first time, the court permitted a case to proceed where the plaintiffs did not have a direct commercial relationship with the defendant – were not customers or competitors of the gun manufacturers. In applying CUTPA to the issue of gun violence, the court seemingly opened the door to more expansive applications of this law to meet other future challenges.

On CUTPA’s jubilee, we should embrace this piece of legislation that has worked as intended. Our business community and consumers are better for it.

Attorney David A. Slossberg leads the business litigation practice at Hurwitz, Sagarin, Slossberg & Knuff. He is an author of the definitive treatise on unfair trade practices in Connecticut. He can be reached at dslossberg@hssklaw.com or 203-877-8000.